In Croatia, AIFs are most commonly established as open- or closed-ended funds with a contractual structure, meaning they are not separate legal entities but pools of assets managed by a licensed AIF management company. Investors hold units representing their proportional interest. This structure is favoured for its regulatory clarity, operational flexibility and ability to tailor investment strategies. Its main drawback is the fund’s reliance on the management company for all legal acts, which may limit structural independence.

Some specialised AIFs – particularly real estate or private equity AIFs – may also be structured as joint stock companies (dioničko društvo; dd) or limited liability companies (društvo s ograničenom odgovornošću; doo), where investors hold shares. These corporate vehicles allow greater governance control and direct ownership of underlying assets but involve higher administrative burdens.

Investment managers and advisers typically operate as AIF management companies licensed by the Croatian Financial Services Supervisory Agency (Hrvatska agencija za nadzor financijskih usluga; HANFA), which may also delegate specific advisory functions to specialised Croatian or EU-regulated firms.

Setting up an AIF in Croatia requires authorisation by HANFA. The process begins with establishing or appointing a licensed AIF management company, which submits the fund for approval. Required documentation includes the AIF rules (fund contract), prospectus or offering memorandum, depositary agreement, valuation methodology, investment strategy description, risk management framework, and proof of the organisational and capital adequacy of the manager.

For privately offered AIFs, the procedure is generally faster and less burdensome, since they are targeted at professional or qualified investors.

For publicly offered AIFs, requirements are more extensive, involving detailed disclosures and stricter investor protection standards, which prolongs timelines and increases costs.

Overall, while the regulatory process is structured and thorough, establishing an AIF in Croatia is considered efficient and competitively priced relative to other EU jurisdictions.

In Croatia, investors in investment funds – whether UCITS or AIFs – benefit from strictly limited liability. Because investment funds are typically established as contractual funds without legal personality, investors are liable only up to the amount of their contributed capital. They cannot be required to provide additional payments, nor can their personal assets be used to satisfy the fund’s obligations.

Where an AIF is structured as a separate legal entity (ie, a company) shareholders likewise enjoy limited liability. Their exposure is restricted to the amount of their subscribed shares. The company itself, not its investors, bears responsibility for any debts or claims.

Croatian law also requires AIFs to appoint a depositary (which is a fully registered credit institution) and operate under a licensed management company, which further protects investors by ensuring proper asset segregation, safekeeping and compliance oversight. This framework ensures a stable, investor-protective environment consistent with EU regulatory standards.

Croatia’s disclosure and reporting framework aligns with the EU regime, promoting investor protection, transparency and market integrity. Specifically, Croatian law imposes comprehensive disclosure and reporting requirements for both UCITS and AIFs. All funds must provide investors with key investor information documents (KIIDs), including a prospectus or offering memorandum detailing the investment strategy, risk profile, fees and rights of investors.

AIF management companies are required to regularly report to HANFA on financial performance, net asset value, risk management, leverage and compliance matters. Annual and semi-annual reports must also be made available to investors, ensuring transparency regarding fund operations and holdings.

For publicly offered AIFs, additional pre-marketing disclosure obligations apply, including detailed information on investment objectives, policies and conflicts of interest. Privately offered AIFs, while subject to lighter disclosure requirements, must still provide sufficient information to professional or qualified investors to allow informed decision-making.

AIFs primarily target professional and qualified investors, reflecting their higher risk profile, specialised strategies and often-limited liquidity. Typical investors include institutional investors (such as pension funds, insurance companies and banks), high net worth individuals, and family offices seeking portfolio diversification and access to non-traditional asset classes like private equity, real estate and venture capital.

Investor appetite for AIFs has been steadily growing, driven by portfolio diversification goals, the search for higher returns and increasing familiarity with alternative strategies. While retail participation is limited due to regulatory restrictions, there is rising interest among experienced investors willing to allocate a portion of their wealth to such funds. Overall, Croatia’s AIF market remains niche but dynamic, catering to sophisticated investors with long-term investment horizons and tolerance for higher risk.

AIF managers are typically established as licensed AIF management companies, which are either joint stock companies (dd) or limited liability companies (doo). However, AIF managers may also be established as Societas Europaea (SE). These entities must obtain authorisation from HANFA and meet capital, governance and organisational requirements. The corporate structure provides limited liability for owners and ensures the separation of managerial responsibilities from investors’ assets.

Management companies are responsible for fund administration, portfolio management, risk monitoring and regulatory compliance. An AIFM may delegate the functions it is required to perform to specialised third-party firms provided these entities are qualified and meet regulatory standards, if it has previously notified HANFA thereof. This framework ensures that managers operate professionally while protecting investors’ interests and maintaining compliance with the requirements of the Alternative Investment Fund Managers Directive (AIFMD).

In Croatia, investment in AIFs is generally restricted solely to professional and qualified investors, in line with EU AIFMD requirements. Professional investors include entities that have appropriate authorisation or are subject to supervision by a competent supervisory authority to operate on the financial market, such as legal entities, pension funds, insurance companies, banks and other financial institutions or institutional investors, and big corporates, while qualified investors may include high net worth individuals or entities meeting certain sophistication and capital thresholds.

Privately offered AIFs cannot be marketed to the general public, and their subscription is typically subject to minimum investment amounts, ensuring that only investors with sufficient experience and risk tolerance participate. Publicly offered AIFs have stricter disclosure requirements but remain largely limited to investors capable of understanding the fund’s risk profile. These restrictions protect less sophisticated investors from exposure to higher-risk, less liquid alternative strategies while promoting a transparent and stable investment environment. They also align Croatia’s regulatory framework with broader EU investor protection standards.

AIFs in Croatia are regulated primarily under the Alternative Investment Funds Act and local by-laws thereof, and in any case all under the EU AIFMD framework, supervised by HANFA. All AIFs must be managed by a licensed AIF management company, which ensures compliance with operational, governance and risk management requirements. The regulatory regime emphasises investor protection, transparency and prudential oversight.

Investment limitations vary by fund type and investor category. Privately offered AIFs targeting professional investors enjoy flexibility but must adhere to leverage limits, eligible asset rules and risk-spreading principles. Private equity AIFs primarily invest in established businesses with the aim of improving their operational and financial performance, and ultimately generating returns, using equity or equity-like instruments. These equity-like instruments combine elements of equity and debt, with returns linked to the company’s performance and limited repayment security, and include instruments such as subordinated loans, participating loans, convertible bonds and bonds with warrants. A venture capital AIF focuses mainly on newly established or early-stage companies with growth potential, investing primarily through equity or equity-like instruments while allowing limited use of loans as a supplement, such as bridge financing for existing portfolio companies. In addition, private offering AIFs may specialise in real estate investments or focus on specific industries, sectors or assets, such as sustainable development, technology, energy or commodities like precious metals and art. For each type of investment, there are additional specific conditions and limitations that must be met to ensure compliance and safeguard investors.

Publicly offered AIFs, on the other hand, are subject to stricter regulations designed to maintain balanced portfolios and reduce risks. These include requirements for diversification, limits on exposure to illiquid or high-risk assets, and exposure caps on investments in individual issuers or sectors. The primary assets these funds can invest in include transferable securities, money market instruments, units in collective investment schemes, deposits with credit institutions, financial derivatives, commodities and real estate, among others. For each asset class, there are additional specific conditions and limitations that must be met to ensure compliance and safeguard investors.

HANFA monitors compliance through regular reporting, annual audits and assessment of management companies’ capital adequacy, ensuring that alternative funds operate within a transparent and secure regulatory framework.

Non-local service providers involved in the Croatian AIF market – including administrators, depositories, custodians and directors – are generally subject to regulatory oversight or recognition requirements. While the primary responsibility rests with the licensed Croatian AIF management company, any delegated functions to non-local providers must comply with AIFMD delegation rules.

Non-local custodians or administrators must demonstrate that they are regulated in their home jurisdiction and meet equivalent prudential, operational and risk management standards. Depositary (custody) services are separately licenced under the Alternative Investment Funds Act. In any case, HANFA may require notification, approval or contractual documentation confirming that delegated entities adhere to these standards and can properly perform their roles.

This framework ensures that all critical functions are performed to the same regulatory standard as Croatian providers, maintaining investor protection and operational integrity within the AIF.

Non-local managers of AIFs seeking to operate in Croatia are subject to HANFA approval and compliance with the Croatian AIF regulatory framework, in line with EU AIFMD rules on cross-border marketing and management. Non-local managers must either establish a branch in Croatia or operate through a passporting mechanism if authorised in another EU/European Economic Area (EEA) state.

They must ensure that a licensed Croatian AIF management company oversees the fund or that the non-local manager itself meets equivalent organisational, capital, governance and risk management standards. HANFA requires documentation demonstrating licensing in the home jurisdiction, compliance with prudential rules and delegation arrangements for administrative, custodian or advisory functions.

In Croatia, the timeframe for obtaining regulatory approval for investment funds depends on the type of fund and its target investors. For privately offered AIFs aimed at professional or qualified investors, approval is relatively swift, typically taking 4–8 weeks, provided that the management company is licensed and all required documentation is complete and accurate.

For publicly offered AIFs or UCITS funds, which are subject to more extensive disclosure and investor protection requirements, the process can take a few months, reflecting the need for detailed review of prospectuses, operational arrangements, and compliance with diversification and leverage rules.

Overall, the approval process in Croatia is considered efficient and transparent, particularly for funds targeting professional investors, while still ensuring robust regulatory oversight and investor protection.

Firms that conduct or intend to conduct pre-marketing activities in Croatia in relation to AIFs must comply with the Croatian Alternative Investment Funds Act. Pre-marketing is defined as the direct or indirect provision of information or communications on investment strategies or ideas by a UAIF, or on its behalf, to potential professional investors in Croatia or other EU Member States, in order to test their interest in an AIF, provided that such activities do not amount to an offer or distribution.

Pre-marketing may be carried out only by an undertaking for the management of AIFs (društvo za upravljanje alternativnim investicijskim fondovima; UAIF) or certain authorised entities, including investment firms, credit institutions, UCITS management companies, other EU UAIFs or tied agents. The information provided must not enable investors to commit to an investment and must not resemble subscription forms or final offering documents. Units may not be acquired during the pre-marketing phase, and investments made within 18 months are deemed marketing and trigger notification obligations. UAIFs must properly document all activities and, if based in Croatia, notify HANFA within two weeks of commencement.

UAIFs are not required to notify HANFA in advance of the content of pre-marketing activities or the persons to whom they are addressed. They must only submit a notice to HANFA within two weeks after commencing pre-marketing, specifying the member states where the activities are or were conducted, the relevant time periods, a brief description of the pre-marketing activities (including the investment strategies presented) and a list of the AIFs concerned.

Marketing activities may be carried out only by authorised entities, including the AIF manager (UAIF), investment firms, credit institutions, UCITS management companies and other domestic or EU UAIFs, or their tied agents. Prior to commencing marketing, a UAIF must submit a formal notification to HANFA containing detailed information on the AIF, its rules, and its depositary and investor protection measures. HANFA has 20 working days to review the notification and, if compliant, confirm that marketing may begin. Similar notification requirements apply to the marketing of third-country AIFs. UAIFs are subject to ongoing obligations, including reporting material changes in advance or without delay and maintaining proper records of marketing activities. Promotional communications must be fair, clear, accurate and transparent regarding risks. Non-compliance may result in supervisory measures or a prohibition on marketing.

Marketing to retail investors is generally prohibited for privately offered AIFs, which can only be promoted to professional or qualified investors. Publicly offered AIFs must meet stricter disclosure, transparency and suitability requirements.

Professional investors include institutional entities such as banks, insurance companies, pension funds and investment firms, while qualified investors typically include high net worth individuals or entities that meet certain sophistication and capital thresholds.

These restrictions are designed to ensure that only investors with sufficient experience, knowledge and risk tolerance can access alternative investment strategies, safeguarding less sophisticated investors and maintaining the integrity and stability of the Croatian funds market.

Marketing of AIFs generally requires prior authorisation or notification to HANFA, depending on the fund type and the origin of the manager. For domestic AIFs managed by a Croatian licensed AIF management company, the fund must be formally authorised by HANFA before any marketing can occur. The process involves submitting the fund rules or prospectus, depositary agreement, investment strategy, risk management framework, and proof of managerial and operational compliance. HANFA reviews the documentation to ensure compliance with Croatian and EU regulatory standards.

For non-local AIF managers passporting into Croatia, a notification procedure applies. The foreign manager must provide HANFA with evidence of home state authorisation, fund documentation and delegation arrangements. Marketing may only commence once HANFA acknowledges receipt of the notification and confirms compliance with applicable investor protection requirements.

Licensed AIF management companies must ensure continuous compliance with investment restrictions, risk management procedures and corporate governance standards.

Key ongoing requirements include:

• regular reporting to HANFA on fund performance, net asset value, leverage and compliance;
• provision of periodic reports to investors, typically semi-annual and annual, detailing financial statements, portfolio composition, risk exposure and fees;
• maintaining adequate internal controls and capital, including liquidity monitoring and valuation procedures;
• supervision of delegated functions, such as administration, custodianship or advisory services, ensuring that third-party providers meet regulatory standards; and
• record-keeping and audit compliance, facilitating HANFA oversight and investor protection.

Privately offered AIFs may only be marketed to professional and qualified investors, while retail participation is generally prohibited. Publicly offered AIFs, although subject to stricter disclosure, remain largely restricted to investors capable of understanding complex investment risks. Certain high-risk strategies, such as leverage or illiquid asset exposure, are limited by regulatory thresholds to protect investors from excessive risk concentration.

Regulatory reporting requirements include regular submissions to HANFA covering fund performance, net asset value, risk exposure, leverage and compliance matters. Funds must also provide semi-annual and annual reports to investors, detailing portfolio composition, valuation, fees and risk management practices. Additionally, licensed management companies must maintain proper records, conduct audits and supervise delegated service providers, ensuring transparency, accountability and investor protection in line with Croatian and EU standards.

HANFA adopts a proactive and approachable regulatory approach. HANFA encourages open dialogue with fund managers, service providers and investors to ensure clarity on regulatory requirements and compliance expectations. Written guidance, Q&A documents and detailed instructions are publicly available, supporting transparency and consistency in regulatory enforcement.

Face-to-face meetings with HANFA officials are possible and commonly arranged, particularly for new fund authorisations, complex compliance matters or pre-marketing consultations. These meetings allow managers to clarify procedural requirements, discuss fund structures and address regulatory queries directly, helping to streamline approval processes.

HANFA also maintains regular communication channels, including email and phone consultations, and provides timely feedback on filings and notifications. Overall, the regulator’s approach balances strict compliance oversight with accessibility, fostering a co-operative environment while maintaining investor protection and market integrity.

Retail investment funds in Croatia are primarily organised under two principal regulatory frameworks: (i) UCITS funds and (ii) open-ended public-offer investment funds. These structures are designed to balance investor protection, regulatory oversight and market accessibility, while offering flexibility in legal form and investment mechanics.

Croatian retail funds may be established either as contractual funds or as investment company funds. Contractual funds are the predominant structure and are formed as separate pools of assets without legal personality. They are established and managed by a licensed management company acting in its own name but for the collective account of unit holders. By contrast, investment company funds possess legal personality and, where permitted, are typically structured as limited liability companies. A specific subtype includes UCITS exchange-traded funds (ETFs), whose shares are admitted to trading on a regulated market.

Contractual funds benefit from clear segregation of fund assets from the management company, lower establishment costs and simplified governance. However, investors hold contractual rights rather than equity interests, and liquidity may be affected if redemptions are temporarily suspended. Investment company funds offer transferable or listed shares and traditional shareholder rights but involve higher formation and compliance costs, and may be exposed to corporate-level taxation prior to distributions.

Investors in contractual funds acquire units, while those in investment company structures hold shares. Management companies must be licensed legal entities supervised by HANFA, with EU or third-country managers able to operate through passporting or a Croatian branch.

The establishment of a retail investment fund in Croatia, including UCITS funds, requires two parallel regulatory approvals: authorisation of the management company and approval of each individual fund by HANFA.

A UCITS management company may be incorporated as a limited liability company or joint stock company and needs to be properly licensed by HANFA. The application must include detailed information on the founders and share capital, evidence of compliance with regulatory capital requirements, organisational and IT structures, fit-and-proper assessments for management and key personnel, financial projections, internal control frameworks and AML/CFT procedures. HANFA may request additional documentation during the review. Although no statutory deadline applies, in practice HANFA assesses completeness within approximately 30 days and issues a decision within 60–90 days.

Once licensed, the management company must seek separate approval for each UCITS fund. The application includes the fund prospectus, rules, KIID, depositary agreement, audited financial statements and evidence of compliance with organisational requirements. HANFA must decide within 60 days of a complete filing.

From licensing to launch, the process typically takes three to four months, with moderate regulatory costs and well-standardised documentation requirements.

In Croatia, investors in retail funds always enjoy liability limited to the amount they invest. In the typical contractual fund (an open investment fund without legal personality), the fund’s assets are held in segregation from both the management company’s and the investors’ other assets. Unit holders have no obligation to make additional contributions or to cover the fund’s liabilities; their claim is limited to the redemption price of the units they hold.

Where a fund is established with legal personality, investors subscribe for shares and, as in any share-holding company, may lose no more than the amount paid for those shares. They incur no further calls for capital nor personal liability for the fund’s debts.

In closed-end retail or alternative funds set up as limited-liability companies or limited partnerships, investors’ risk likewise never exceeds their committed capital.

In all common retail structures, therefore, an investor’s maximum loss is the full amount of its original investment; there is no statutory provision under which investors become personally liable for any fund obligation beyond their paid-in contributions.

In Croatia, retail investment funds established as UCITS are subject to comprehensive ongoing disclosure and reporting obligations under the Act on Open-Ended Investment Funds with Public Offering and the related implementing regulations. These requirements are designed to ensure a high level of transparency and investor protection in line with EU UCITS standards.

At the outset, each UCITS must prepare and publish a prospectus and a KIID. These documents must clearly set out the fund’s identity, investment objectives and strategy, risk profile, historical performance, applicable fees and costs, and practical information for investors.

Ongoing reporting obligations apply throughout the life of the fund. Management companies are required to publish monthly reports on the fund’s operations by the 15th calendar day of the following month. In addition, half-yearly and annual reports must be prepared, including detailed financial statements, cash flow information, changes in net assets, performance indicators, valuation reports and explanatory notes. Annual reports must also include comprehensive disclosures of investments in instruments issued by related parties.

All reports must be published on the management company’s website within the prescribed deadlines. Upon request, investors are entitled to receive free hard copies of the latest half-yearly and annual reports, ensuring continuous access to key information.

In Croatia, retail funds are widely accessible and enjoy moderate but steadily growing investor appetite, driven by increasing financial awareness and trust in regulated investment products. The market is dominated by individual investors, including salaried professionals and high net worth individuals seeking diversified, low- to medium-risk investment options.

Institutional investors, such as pension funds and insurance companies, also participate in retail UCITS funds, though to a lesser extent than in alternative funds. Investors are generally attracted by the liquidity, regulatory safeguards and diversified strategies that retail funds offer, making them a preferred choice for long-term wealth accumulation and risk-managed growth.

On a more general note, there are three recognised types of investors in the retail fund segment:

• retail investor (investor who is neither a professional nor a qualified investor);
• professional investor (investor who qualifies as a professional investor under capital markets legislation or is treated as such upon request); and
• qualified investor (investor who has sufficient experience and expertise to understand the risks of investing in an AIF, is willing to invest a certain minimum amount in a single fund or meets certain additional criteria).

Overall, Croatian retail investors demonstrate a preference for accessible, transparent and well-regulated funds, contributing to steady inflows and growth in the UCITS segment, while appetite for higher-risk alternative products remains largely confined to professional investors.

Retail fund managers, responsible for managing UCITS and other publicly offered retail funds, are typically established as licensed investment management companies, structured as either joint stock companies or limited liability companies. These entities must obtain authorisation from HANFA and meet capital, governance and operational requirements.

As an alternative, UCITS funds may be managed by management companies from other EU member states, either through a Croatian branch or on a cross-border services basis under the EU passporting regime.

In Croatia, retail funds, primarily UCITS, are designed to be accessible to the public, meaning there are generally no restrictions on the types of investors who may participate. Both individual and corporate investors can subscribe, allowing broad participation across private individuals, high net worth investors, pension funds and other institutional entities.

However, certain fund types may impose eligibility criteria or minimum subscription amounts for operational or risk management reasons, such as feeder funds or specialised UCITS strategies. Additionally, while retail investors can generally access these funds, marketing and distribution must comply with strict regulatory disclosure and suitability requirements, ensuring that investors receive clear information about the fund’s objectives, risks and fees.

UCITS funds face specific investment limitations to control risk and ensure diversification. These include restrictions on concentration, limiting exposure to a single issuer or group, and eligible asset rules, permitting investments only in transferable securities, money market instruments and approved collective investment schemes. Leverage is capped, and exposure to illiquid or high-risk assets is limited. Short selling is generally restricted, and all investments must comply with risk-spreading principles.

The funds must also appoint a licensed depository to safeguard assets, monitor compliance with investment limits and oversee cash flows. HANFA enforces these regulations through regular reporting, audits and supervisory reviews, ensuring that retail funds operate safely, transparently and in the interests of investors.

Non-local service providers, including administrators, depositaries or outsourced directors (IT, risk management and similar services), do not need separate registration or licensing in Croatia but must comply with key requirements. While the primary responsibility rests with the licensed Croatian investment management company, any delegated functions must comply with sector-specific rules.

Non-local custodians or administrators must demonstrate that they are regulated and licensed in their home jurisdiction, meet equivalent prudential and operational standards, and be capable of fulfilling their roles reliably. HANFA may require notification, approval or contractual documentation confirming the delegation arrangements and regulatory compliance.

EU-based management companies directly managing Croatian UCITS must notify HANFA and provide confirmation from their home regulator, including the scope of managed funds; however, non-local providers may operate under these conditions without additional Croatian authorisation.

Non-local managers seeking to operate retail funds in Croatia must comply with HANFA requirements under the Act on Open‑Ended Investment Funds with Public Offering and EU UCITS Directives. Foreign managers can either establish a licensed Croatian branch or operate through a passporting mechanism if authorised in another EU/EEA member state. A management company must submit to HANFA the notification and supporting documents required under the Act. If it intends to directly manage UCITS funds in Croatia, it must also provide confirmation from its home state regulator of authorisation, a description of permitted activities and any applicable limitations.

They must demonstrate that they meet equivalent organisational, capital, governance and risk management standards as Croatian management companies. HANFA may require documentation confirming home-state authorisation, fund structures, investment strategies and delegated functions, such as custody or administration.

The approval process in Croatia is considered transparent and efficient, with timelines largely dependent on the completeness of submissions and the fund’s complexity.

Obtaining regulatory approval for retail funds, primarily UCITS funds, depends on the fund type and investor scope. For privately offered UCITS, the approval process is relatively straightforward, assuming the licensed management company has submitted complete documentation, including the fund rules or prospectus, depositary agreement, risk management framework and operational procedures.

For publicly offered UCITS, which are subject to stricter disclosure and investor protection requirements, HANFA conducts a more detailed review. This process can take a few months, reflecting the need to assess prospectus content, investment restrictions, governance arrangements and compliance with UCITS limits on diversification, leverage and eligible assets.

The Croatian Act on Open‑Ended Investment Funds does not recognise “pre-marketing” of UCITS funds. Thus, one should consider any communication that could reasonably enable or encourage an investor to invest to be treated as marketing/distribution and is therefore subject to regulatory requirements as described in 3.3.6 Rules Concerning Marketing of Retail Funds.

Firms marketing retail funds in Croatia, primarily UCITS funds, are subject to HANFA regulation and must comply with the Act on Open‑Ended Investment Funds and EU UCITS marketing rules. Marketing can only be carried out by licensed investment management companies or authorised non-local managers.

All marketing communications must be clear, fair and not misleading, fully disclosing the fund’s investment strategy, risks, fees, redemption terms and performance. Marketing to retail investors generally requires prior regulatory approval from HANFA, including approval of prospectuses or key investor documents.

Non-local firms may market via passporting if authorised in their home EU/EEA jurisdiction, subject to notification to HANFA. Firms must maintain records of marketing activities and ensure compliance with suitability requirements, anti-money laundering rules and transparency standards.

Retail funds in Croatia, primarily UCITS, are designed for broad public participation and may generally be marketed to all types of investors, including individuals and corporate entities.

In Croatia, marketing of retail funds (primarily UCITS) requires prior authorisation or notification to HANFA. Domestic funds must obtain full regulatory approval before marketing to retail investors. This involves submitting the fund prospectus, depositary agreement, investment strategy, risk management framework and operational procedures. HANFA reviews these documents to ensure compliance with UCITS rules, investor protection standards and transparency requirements.

Non-local managers may market retail funds via passporting within the EU/EEA, provided they are authorised in their home jurisdiction. In such cases, HANFA must be notified, and the manager must demonstrate compliance with local rules, including the fund’s documentation, delegation arrangements and investor protection measures.

Marketing may only commence once HANFA has granted approval or acknowledged notification, ensuring that investors are approached with fully authorised, compliant and transparent fund products.

Firms that have marketed a retail fund in Croatia, primarily UCITS, are subject to ongoing regulatory obligations under the UCITS regulatory rules. Key requirements include:

• regular reporting to HANFA, including audited annual accounts, semi-annual reports, net asset values, and compliance confirmations;
• investor reporting, providing semi-annual and annual reports detailing portfolio composition, performance, fees and risk exposure;
• risk management and governance, maintaining robust internal controls, liquidity monitoring and accurate asset valuation;
• compliance oversight, ensuring delegated functions such as administration, advisory and custody meet regulatory standards; and
• anti-money laundering and market conduct compliance, adhering to EU and Croatian regulations.

Under Croatian law, retail investment funds are subject to a distinct and more protective regulatory framework designed to safeguard non-professional investors. UCITS funds constitute the core category of retail funds and may be marketed freely to retail clients provided they comply with the UCITS regime on diversification, liquidity, eligible assets and disclosure. By contrast, only a limited subset of AIFs may qualify as retail AIFs, and this designation is strictly regulated under the Croatian Ordinance on the Types of AIFs. Retail AIFs must satisfy enhanced requirements on portfolio composition, valuation, risk management and redemption procedures to ensure a risk profile appropriate for non-professional investors.

Any AIF that does not fall within the retail-eligible categories — including those employing complex or illiquid strategies — may not be marketed to retail investors under any circumstances. Marketing of retail AIFs also requires prior authorisation by HANFA, and managers must provide standardised disclosure documents, ensure robust investor information procedures and maintain facilities for handling subscriptions, redemptions and complaints. These restrictions ensure that only funds with a regulated, transparent and retail-suitable structure may be offered to retail investors in Croatia.

HANFA is generally regarded as a structured and transparent regulator that maintains a formal but co-operative supervisory approach. Communication typically occurs through written channels, including official submissions via HANFA’s electronic system, but the regulator is approachable and open to direct engagement when justified by the complexity or significance of a matter. Face-to-face meetings are possible, though not automatically granted; they are usually arranged upon request in the context of authorisation procedures, complex supervisory issues or cross-border notifications.